Overview
Mantle is an Ethereum Layer 2 that emerged from BitDAO, one of the largest DAOs by treasury size. The project was proposed and approved by BitDAO governance in 2023, with the BIT token converting to MNT as the native token. Mantle launched its mainnet in July 2023 and is developed by Mantle Core, with backing from Bybit (the exchange behind BitDAO).
Mantle differentiates itself through a modular architecture, using EigenDA (EigenLayer's data availability service) instead of posting all data to Ethereum L1. This reduces costs but also reduces security guarantees. The project has one of the largest treasuries in crypto, estimated at over $3 billion, which it deploys aggressively for ecosystem growth.
The team has also launched Mantle LSP (a liquid staking protocol for ETH, now called mETH) which has become one of the largest LSP products, furthering the ecosystem's reach.
Technology
Rollup Architecture
Mantle is an optimistic rollup with a modular twist: it uses EigenDA for data availability instead of posting full transaction data to Ethereum L1. This makes it technically an optimium (optimistic rollup + external DA) rather than a pure rollup. The execution layer is a modified version of the OP Stack. MNT is used as the native gas token instead of ETH.
Performance
Mantle achieves approximately 20-40 TPS with low transaction costs, often under $0.01 for simple transfers. Using EigenDA for data availability significantly reduces L1 posting costs. Soft confirmation is near-instant, with the standard 7-day challenge period for L1 finality.
Innovation
The modular DA approach (using EigenDA) is Mantle's key technical differentiator, demonstrating how L2s can trade off some security guarantees for lower costs. The integrated mETH liquid staking product creates synergies between the L2 and DeFi verticals. Mantle also introduced a custom MNT gas token model rather than using ETH.
Security
Bridge Security
Assets bridged to Mantle are secured by L1 smart contracts, but with important caveats. Since Mantle uses EigenDA rather than Ethereum for data availability, the data needed to reconstruct the chain state is not available on Ethereum itself. This means in a worst-case scenario, data availability failures could prevent users from proving their balances and withdrawing.
Proof System
As an optimistic rollup, Mantle relies on a fraud proof system with a 7-day challenge window. However, the fraud proof system is still in development — currently operating with a whitelist of permitted challengers rather than permissionless fraud proofs. This means the security model effectively relies on the Mantle team's honesty.
Track Record
Mantle has not experienced a major security incident. The chain is relatively new (launched mid-2023) with limited adversarial battle-testing. The use of EigenDA introduces additional trust assumptions beyond standard rollups. Audits have been conducted by OpenZeppelin and Secure3.
Decentralization
Sequencer
The sequencer is centralized, operated by the Mantle team. Transaction ordering and inclusion are controlled by a single entity. No concrete decentralized sequencer plan has been committed to. The use of a custom gas token (MNT) further ties the chain's operation to the core team's decisions.
Governance
MNT token holders can participate in governance through Mantle's DAO (inherited from BitDAO). The DAO controls the massive treasury and votes on ecosystem proposals. However, governance participation has been low, and Bybit's influence as the largest stakeholder is significant. Mantle Core operates with considerable autonomy.
Upgrade Mechanisms
Protocol upgrades are controlled by a multisig operated by the Mantle team. The governance structure allows for DAO proposals, but emergency upgrades can bypass this process. The concentration of power in a small team, backed by a single exchange, raises concerns.
Ecosystem
dApp Landscape
Mantle's ecosystem has grown primarily through aggressive incentive programs. Key protocols include Agni Finance (DEX), INIT Capital (lending), Pendle (deployed from Arbitrum), and various DeFi protocols attracted by liquidity mining rewards. TVL has ranged from $1-3B, partly inflated by mETH deposits. The chain has struggled to attract unique, native protocols.
Developer Tools
Full EVM compatibility (via OP Stack) ensures standard tooling works. Mantle offers generous developer grants funded by its treasury. However, the use of MNT as a gas token (instead of ETH) creates some friction for developers and users accustomed to the standard ETH gas model.
Growth Metrics
Daily transactions range from 100K-300K. TVL figures are boosted by mETH (Mantle's liquid staking ETH), which may overstate actual on-chain DeFi activity. Unique addresses have grown but much activity is driven by incentive programs, raising questions about organic adoption.
Tokenomics
Token Overview
MNT has a total supply of approximately 6.2 billion tokens (converted from BIT). A significant portion is held in the Mantle Treasury (controlled by the DAO). The treasury also holds substantial ETH, stablecoins, and other assets, making it one of the richest project treasuries in crypto.
Utility
MNT is used as the native gas token on Mantle (instead of ETH), governance voting, and ecosystem incentives. The gas utility provides real demand for the token. However, the massive treasury holdings mean the DAO's own MNT position significantly influences the token's market dynamics.
Incentive Programs
Mantle has deployed hundreds of millions in ecosystem incentives, including DeFi liquidity mining programs, developer grants, and strategic partnerships. The mETH liquid staking product has been used to attract ETH deposits. The sustainability of this incentive-driven model is debatable — treasury depletion is a long-term risk.
Risk Factors
- EigenDA Dependency: Using external DA instead of Ethereum L1 introduces additional trust assumptions and potential data availability failures that could compromise user fund safety.
- Fraud Proofs Not Live: The fraud proof system is not yet permissionless, meaning security relies on the honesty of the Mantle team rather than cryptographic guarantees.
- Incentive Dependency: Ecosystem growth appears heavily dependent on treasury-funded incentives, raising sustainability concerns if organic demand doesn't materialize.
- Bybit Concentration: The close relationship with Bybit (a centralized exchange) and its influence over governance creates concentration risks and potential regulatory exposure.
- Unproven Modular Architecture: The optimistic rollup + EigenDA combination is relatively unproven compared to standard rollup designs.
- MNT Gas Token Risk: Using a native token for gas instead of ETH creates additional volatility risk for users and may deter adoption.
Conclusion
Mantle's greatest asset is its treasury — one of the largest in crypto, enabling aggressive ecosystem building and sustained incentive programs. The modular architecture using EigenDA demonstrates a pragmatic approach to cost reduction, and mETH has become a successful product in its own right.
However, the fundamentals raise concerns. The fraud proof system is incomplete, the DA layer introduces non-standard trust assumptions, and ecosystem activity appears heavily incentive-driven. The close ties to Bybit and centralized governance structure make Mantle more of a corporate product with a DAO wrapper than a truly decentralized L2.
For users, Mantle offers low costs and generous rewards. For those evaluating the protocol's long-term security and decentralization properties, the current state falls short of what the L2 label implies.